If the average couple wants to retire in the United States at the expected date they quit working and achieve the median lifespan, then $1.25 million is needed at a minimum. That’s in addition to any Social Security benefits that may be available.
That figure assumes that a retirement income of $50,000 per year is necessary. If you can live on less, then you don’t need to save as much.
Most Americans don’t even have $1,000 in their savings account right now. The only way to reach the amount needed for retirement is to start focusing on financial planning and wealth management today.
Financial Planning Tips for Success
Making decisions that improve your financial situation isn’t always comfortable. The basics of wealth management always stay the same. If you can get these tips right, then you’ll see your money start growing.
1. Spend Less Than You Earn
It is impossible to get ahead if your spending is out of control. Even if you live paycheck-to-paycheck, look for cost-cutting opportunities to put a little bit away each month. The savings will start to add up over time.
2. Keep to Your Budget
If you don’t know where your money goes, then it is a challenge to stop paying for things you don’t need. Set savings and spending goals in every budget category so that you can figure out where there are some places to trim.
3. Get Rid of the Credit Card Debt
This problem is the primary issue that holds everyone back from financial independence. Use your credit cards for emergencies only unless you can pay off the balance each month to take advantage of a rewards program. If you have $4,000 on a single card with an average APR, then you’re paying over $500 per year in interest payments alone.
4. Contribute to a Tax-Advantaged Retirement Plan.
If you don’t contribute to a 401(k) plan from your employer, then you’re walking away from free money. Try to maximize your contributions to an IRA and other tax-advantaged programs. It’s a simple way to put 5% of your paycheck into savings, and it can sometimes come before taxes come out of your wages.
When you can maximize your employment benefits and income, then you can grow your wealth if you keep spending in check. Resolve to get the basics right this year by following these steps so that your money worries can come to an end.